Government agencies' efforts in removing and simplifying business conditions have so far only achieved the target on quantity, leaving much to be desired for more substantial changes to improve Vietnam's business environment, according to VCCI.
Overview of the conference. Source: Ngoc Thuy.
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The process is considered a stepping stone towards the goal of achieving a market economy, Loc added.
Loc referred to the fact that every year, local governments issue over 1,000 legal documents on average, of which around 50% are related to business activities, implying the importance of business in Vietnam's legal system.
"In a six-month period, the government could introduce thousands of regulations which are having direct impacts on enterprises," he added.
With new policies coming out every year, it is important for them to be evaluated and evaluated whether they are having a positive impact on the business environments, according to Loc.
Economist Pham Chi Lan expressed her concern over the large number of enterprises suspending their operations recently.
In the first six months this year, over 64,000 new enterprises were set up, up 5.3% year-on-year, but nearly 53,000 enterprises suspended operations, up 34.7% year-on-year and equivalent to 80% of the number of newly established enterprises, Lan informed.
Moreover, around 283,000 new jobs were created in the second quarter, down 15.7% year-on-year. "The business environment plays a vital role in a high number of enterprises suspending operations," Lan added.
More substantial changes needed
In the past two years, the government has been stepping up efforts to achieve the goal of a market economy.
The government has set target of removing 50% of total business conditions at all ministries and ministry-level agencies before October 31. Additionally, the introduction of Decree No.19 was seen as a bid for Vietnam to become one of the top three business-friendly countries in ASEAN.
"However, the result of this decree remains modest, as some ministries still show the lack of effort towards a common goal," Loc stressed.
Among government agencies, the Ministry of Industry and Trade and the Ministry of Health stood out as examples, by removing 55.5% and 70% business conditions, respectively.
According to Loc, there would be a certain delay in implementing policies, however, the decisive point is that whether ministries are determined to change. "This is the main hindrance," he said.
Moreover, proposals on removing business conditions must be substantial, preventing the case of adding many business conditions into one mathematically, or just simply changing the name of the condition, Loc suggested.
Loc also added that there should be a clear justification of changes in the number of business conditions and goods required for specialized inspection.
As of present, just less than 6% of the number of goods have removed from specialized inspection category, Loc continued.
Meanwhile, the average time for specialized examination is 76 hours per procedure, about three times higher than that of ASEAN - 4 (including Indonesia, Malaysia, the Philippines and Thailand), Loc said, suggesting a more radical review is needed.
In a directive issued on July 13, Prime Minister Nguyen Xuan Phuc strictly prohibited government agencies and ministries from creating new business conditions or abusing specialized inspection.
According to the PM, business condition removal is one of the key measures for economic growth and efficiency, requiring strong efforts from government leaders and ministers.
Phuc requested concerned ministries to submit proposals on reforming the specialized inspection process and simplifying business conditions before August 15.
